According to Snapnames the employee participated in 5% of auctions since 2005/6.
The email's content hasn't been posted at the Snapnames "news" page, however SnapNames has posted a related FAQ here: [snapnames.com...]
Snapnames proposes to make payments, plus interest, in auctions in which the "secret employee bidder" participated. It will be interesting to see exactly how this is worked out as the participation of any one person, at auction, can have a variety of effects. Outcomes are not always a matter of "the last 2 people bidding". For example, some folks may withdraw from an auction simply based upon the number of people bidding at the outset, i.e., thinking there's just too much interest. Others may have withdraw based upon seeing a certain nickname in the auction, under the "Oh no! Not him again! He always bids things up!"
So, is the "solution" simply to refund the winning bidder the amount he/she last bid before the insider-bidder jumped in?
The "settlement" will include 5.22% interest. Better than bank rates, but what if the winner carried a balance on a credit card at 10%+? What about the opportunity cost for some bidders who may have bid against the insider dozens of times, tying up possibly tens of thousands of dollars?
Also, if the insider-bidder won a domain will he/she be made to turn over the domain names hewon at auction, to the benefit of the next highest bidder? It would seem appropriate that SnapNames should sue the former employee to force/compel him to surrender his "winnings".
What if the insider-bidder subsequently sold the domains won at auction for a profit? Should the profits all be taken back?
What's interesting is that there has been buzz on the(message) boards for years about a possible insider-bidder.
My advice: If you participated in a Snapnames action from 2005 onwards be certain that Snapnames has your current info.
What I'd like to see is a complete list of all the auctions with the bidders auction-nic. Not sure we're going to see this.
Interesting how this could take place for years with no one - until now - having actual, actionable knowledge of the activity.
FWIW, I've seen comments elsewhere suggesting that the long suspect bidder "Halvarez" was, in fact, the nickname used by the insider-bidder. Again, strange how there could be public buzz about Halvarez for years and yet, only now, is "that person" being exposed by the company. Say it ain't so!
Regards...jmcc
1) The bidder was well known in domaining circles. A quick Google search will show that many people thought he was a script or inside man. With all the attention the bidder received, SnapNames never thought about looking into this person?
2) He ended up winning a lot of auctions. Are they saying that he paid for all these domains individually out of his own pocket? If the guys goal was to shill auctions, it would appear that winning it would be a bad thing for a "rogue" employee.
3) This person was in so many auctions that I don't see how he had any time to work.
Whole thing seems like a gigantic mess with some holes in it.
You have to be impressed with a company that takes a pro-active stance like that.
Apparently the culprit was a high-level and well-respected employee; someone that no one would ever suspect.
[domainnamenews.com...]
I'm not sure about US legislation but could this become a criminal investigation if complaints were filed?
Regards...jmcc
You have to be impressed with a company that takes a pro-active stance like that
Pro-active?
Damage control?
Attempt to pre-empt class action litigation?
If it's true - that the name used was "Halvarez" - then it's also true that people have been pointing to Halvarez with . . doubts . . for at least a year before the news.
I suspect this won't end with the moneys offered. There probably needs to be full public disclosure: 1) of every auction he was involved in; 2) of every auction he won; 3) of everything that is being done to recoup any names he won; etc.
Corporate VP? Wow. Wow. Wow.
Given how long it has taken to "discover" this one has to wonder if there haven't been other insiders involved. If Halvarez could get away with this, without being discovered for years, that suggests there could be others "as yet undiscovered".
people have been pointing to Halvarez with . . doubts . . for at least a year before the news.
A year? I'd have said a lot longer than that. There are discussions going back to at least 2006 about the behaviour of that bidder.
Ya, given how long the rotten fruit was hanging something just seems off about the "farmer's" report that only now have they been able to figure out that something is rotten.
Smells like there's more rotten fruit in the bins somewhere.
IF Snapnames doesn't do more than just "fire him" - like sue him, seek to recover all ill-gotten gains and at least investigate criminal sanctions - some/many may infer that silence has a price/value, i.e., only pushing him out the door but not going after him with a vengeance could be seen as a move that might keep him from talking about any other suspect activities he might be tuned in to. Might he know about other bad actors or bad acts? Might he have something to say about who knew what and when they first knew it? These are the types of questions that only get answers, in many cases, when the lawsuits are filed, the prosecutor impanels a grand jury, etc.
I'll venture that such insider financial actions, touching on cross-border transactions/commerce, likely implicates more than one Federal law.
Rotten industry? Still, to this day, I see people registering blatant trademark infringing domains and . . parking them. Perhaps not as bad as it once was but there's still no end to it.
This revelation is going to be hard on all the domain auction houses.
Regards...jmcc
According to Snapnames the employee participated in 5% of auctions since 2005/6.
I can't imagine what 5% realy means (10,000 or 1,000,000).
I suspect there is more to this story.
did he have access to view customer maximum bids?
No player in this business is clean. I believe a few more Madoffs of domain business will come out of woodwork in near future.
I can't imagine what 5% realy means (10,000 or 1,000,000).
From the link Webwork provided above;
Brady reportedly drove prices up with fraudulent bids in as many as 50,000 auctions.
It really is astonishing this was going on for 5 years, and not one person at SnapNames suspected anything?
"Craig has been described as a sincerely principaled businessman by those who know him, and is famous for cofounding Marchex. He started working at iREIT in September 2006, just a few months before the DomainQueue domains were transferred to iREIT.
"DNW speculated that Snyder may have been hired by Oversee.net in August of this year to “clean up the company.” Given Craig’s deep understanding of the domain industry, his role overseeing SnapNames, and his insider knowledge about the DomainQueue deal, it may have been an easy scam for him to uncover."
Source:
[dotsnews.com...]
We can't fault new owners for the sins of old leadership.
The thing that bugs me is he was a speaker at domain conferences?!
[dnjournal.com...]
I love this innocent forum question from 2006:
"why is halvarez on snapnames always not the high bidder?"
[dnforum.com...]
p/g
I have to wonder:
- How deep this goes (no way do I buy that this was one individual acting on his own)
- If he was using multiple ID's in addition to halvarez
- If there are other "halvarezes" lurking at the other auction venues.
This is huge. It's not often that a conspiracy theory is proven to be true. When is the last time that has ever happened?
In the domain industry, none that I know of.Snapnames, as they say on UK cop shows, has form. It was heavily involved in the .eu landrush fiasco.
Regards...jmcc
Never a credit card? Never any banking info? No traceable source of the funds . . just thousands of routine and reliable payments? Sounds like an industry that can be trusted: Untraceable funds. Dubious WhoIs records. No real demand for a verifiable identity to be allowed to participate "in the business of auctions". Just pay the bills.
There are likely drug lords that haven't been this successful in "doing business in the open" and moving money around for so long.
OBTW, IF the WhoIs records for the domains are full of inaccuracies, is there any chance of having all those domains canceled? ;0/
Regards...jmcc
Even with full disclosure how does an auction house enforce their rules if it doesn't take steps to assure that insiders aren't feeding information to outsiders who will do their bidding?
How does any auction how deter insider bidding if it doesn't have an audit trail mechanism in place, i.e., require accurate/verifiable WhoIs info that is verified - even if the same info is subsequently made private at the time of transfer and new-registration?
It appears that much may be done to accommodate anonymity of bidder/registration that simultaneously plays into insider bidding scenarios.
My sense is that this matter needs to be placed in the hands of those agencies with criminal investigative and prosecutorial authority, or this industry will forever be damaged.
Will the company itself invite such a housecleaning? Doubtful, but possible.
Can anyone offended, concerned or harmed by this action contact the proper authorities? I don't see why not. At least, perhaps, to report the situation to oversight bodies, attorneys general, FTC, etc.
It's one thing for Snapnames to offer compensation - especially if it does so without requiring any "waiver" of rights. It's another thing to think that the tale ends simply by making reimbursement payments according to their own formula.
It might actually be healthy, and restore confidence, for Oversee/Snapnames to invite the outside investigation. Indeed, though I'm no expert on all the laws involved in this mess, it might actually be required that they report the incidents, activities, etc. since they are dealing with public auctions, interstate commerce, online credit and money transfer transactions, potentially fraudulent (unfair advantage, material misrepresentation, deceptive practices by an executive, etc.) financial transactions, etc. (Hopefully they already have if that's the case.)
My hunch is that the FTC has to have regulatory authority and criminal authority. IF there's no real enforcement or measures to penalize insider-biased transactions then the entire online auction industry is in serious jeopardy. Sure, there have long been all maner of doubts but if ever there was a case to submit to criminal investigation and sanction . . this should be it.
Has there been any mention of the authorities getting involved? Wouldn't Oversee have turned this over for criminal investigation as it could be construed as fraud and embezzlement? As for those harmed by it, I definitely think filing a report with the FTC, FBI, and district attorney of where they are located is warranted.
I know people have respect for some people under the Oversee umbrella, but I think it would be insane to hold any of your domains or use them for anything. If it took them 4+ years to catch someone that many people not invovled with the company already knew, I don't have a lot of faith in them. Our domains are our most precious assets many times and they should be in the hands of people we trust.
full and accurate disclosure of identity
Does anyone actually know how to do this? I'm not aware that a (globally applicable) mechanism actually exists. Perhaps it's time it did!
You only have to look at the way (standard) SSL certificates were "verified" to realise that in many cases there wasn't a whole lot of verification going on. EV-SSL might be better/stricter, but it's expensive and is restricted to certain entities - AFAIK individuals can't get an EV-SSL as an individual.
Webwork - say you opened a responsible domain auction site? How would you suggest I verify my identify were I to open an account with you?
Webdoc, if concealment was elemental - and, as you argue, easy to achieve - why do you suppose Halvarez used the same identity in 50,000 auctions? If obscurity it relatively easy why not use 20, 50, 100 different bidding identities/accounts?
If concealment is easy to achieve, as you state, then should Snapnames participants take them (Snapnames/Halvarez) at their word that there was only 1 scammer and he is Halvarez?
The reason I ask the second question was that I only participated in about 100 auctions, but even in that small sample I saw certain names repeatedly. One was Halvarez, but there were others that appeared to bid at every/most auctions. Who's to say that 1 or 2 of those other bid-identities wasn't simply another alter ego for the man behind Halvarez?
Webdoc, given your proposition
Does anyone actually know
would you therefore conclude that online auctions are inherently untrustworthy . . and therefore not to be trusted? (I wonder how far the regulatory agencies are prepared to go in confronting the issue?)
Regarding identification my home State employs a 6 points of identification [state.nj.us] procedure. I can't imagine using a similar process to assure the integrity of an online bidding system, and even if it was applied, that wouldn't stop strawman bidding.
More interesting questions:
1. What were Snapnames internal procedures for detecting unusal patterns of bidding activity?
2. Was there a pattern to Halvarez's bidding? Did Snapnames deploy any version of pattern detection?
3. "What's different now?"
4. If a company's employees design and administer that company's operations software might that open a few security holes?
would you therefore conclude that online auctions are inherently untrustworthy . . and therefore not to be trusted? (I wonder how far the regulatory agencies are prepared to go in confronting the issue?)
Absolutely ..and that has always been the case ..as has the whole idea of registration companies having their own ..or "arrangements" with certain ones ..
Fraudsters paradise ..as long as you can pay the "buy into the game fee" ( to become a registrar ) to be able to sit at the table and entice the marks to play the game
even if it was applied, that wouldn't stop strawman bidding.
